In HCV infection, about 70% of patients develop persistent viremia and chronic course of infection. Alcohol abuse strongly accelerates the progression of HCV infection. One of HCV structural proteins, known as core protein, induces oxidative stress in liver cells, and this is further potentiated by ethanol. Oxidative stress modulates the functions of many enzymes, including the multi-catalytic protein-degrading enzyme, the proteasome. This enzyme degrades oxidatively modified proteins, signal transduction factors and processes peptides for antigen presentation. We hypothesize that HCV core protein enhances proteasome activity by directly interacting with the enzyme and indirectly, by inducing low levels of oxidative stress. However, in ethanol-exposed liver cells, proteasome activation by core protein is blocked by ethanol metabolism, which suppresses proteasome activity. Potentially, these changes in proteasome activity may affect protein degradation and generation of peptides for antigen presentation. To test this hypothesis, we propose two Specific Aims. Aim 1 will ascertain the mechanism(s) of proteasome activation by HCV core protein and determine whether ethanol metabolism blocks proteasome activation by core protein. Aim 2 will determine whether HCV core protein affects proteasome activity and overall intracellular proteolysis in HCV core-expressing cells and in core-expressing control and ethanol-fed transgenic mice. The results derived from this study will help clarify the mechanism of alcohol-potentiated HCV progression, providing a link between altered proteasome function and processing of HCV peptides for presentation by infected liver cells. This investigation will also provide the framework for future HCV pathogenetic studies, namely, proteasome-dependent regulation of cytokine signaling and MHC class I-resticted presentation of HCV antigens to cytotoxic T-lymphocytes. Both transduction of cytokine signals and antigen presentation can be suppressed by ethanol metabolism. Lay Language Summary: The proposed study will expand our knowledge in the mechanisms of how hepatitis C viral protein and ethanol regulate the enzyme, which degrades proteins. The results of this investigation will partially explain why the immune system is less able to clear HCV in alcoholic compared to in non-drinking patients. We envision that this research will potentially have therapeutic applications, helping to improve chronic hepatitis C treatment and vaccine development